In face of unprecedented opportunity and risk for organizations today, risk management becomes one of the significant management disciplines to deal with them effectively.
With so many things going on, businesses with the right dose of digital appetite, positive risk attitude, and solid risk management approach can digest information, experiment innovation, and improve organizational effectiveness, agility smoothly.
Lack of risk appetite perhaps causes business stagnation: Risk is part of business reality. Lacking risk awareness creates more blind spots uncovered and gaps unfilled. The right dose of risk appetite enables the organizations to tolerate ambiguity, take growth trajectory, encourage innovation, and build resilience. The organizational management has a balanced viewpoint of short term business profit and long term organizational maturity, developing a culture of risk tolerance.
Understand the upside risk when organizations explore the growth opportunities, as well as know the business tolerance of their enterprise for the resulting downside risks from a business operation perspective. It’s business leaders’ responsibility to establish an environment with a high-risk tolerance, in which people can grow and develop, be curious and creative without fear. Assess organizational risk appetite, attitude and maturity of risk management; keep turning business processes, updating knowledge, and developing talent to improve organizational risk intelligence.
It’s important to develop business capabilities and improve risk intelligence: More often, business is still fundamentally looking at risk in a negative context but in reality, risks and opportunities co-exist in today’s business dynamic. Stakeholders ranging from investors to customers, to ordinary citizens, to peer companies might all benefit or suffer from the risk intelligence of a company. Either preventing or mitigating risks, it requires business insight to predict the upcoming risks and help the business prevent potential problems.
Organizations need to have the right dose of risk appetite and high risk intelligence. As long as risks have been identified and agreed with stakeholders as per business needs, then you can take information driven risk models that effectively predict, optimize, and consider sustainable approaches with multifaceted perspectives.
Risks are simply potential problems; solving problems requires people who have excellent analytical and problem-solving skills. Risk management is critical for achieving premium business results. Forethoughtful leadership and open culture plays a significant role in building a proactive problem prevention capability and developing the logical problem-solving scenario.
In face of unprecedented opportunity and risk for organizations today, risk management becomes one of the significant management disciplines to deal with them effectively. By gaining a holistic understanding of the business value of risk management, the approach to manage risk is to look at the effectiveness of the risk management strategy, methodology, and practice, not just for protecting its financial value, but also including people value, reputation value, brand value structurally.
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